Structural change, productivity and the middle income trap: South Africa in comparative perspective

Date :
Thursday, July 3, 2014 - 00:15
Location :
VCRs, Pretoria, Cape Town, Durban

This seminar is based on a paper which discusses the problems faced by middle-income countries in the process of catch-up and development, with a focus on the tendency for these countries to fall into a ‘middle income trap’. The paper finds that growth in labour productivity in South Africa has been associated with labour shedding, rising informality and an increase in low value-added service sector employment. This pattern of growth and structural change shares some similarities with the experience of India but less so with Brazil. South Africa should continue to develop a coherent nexus of trade, industrial and technology policies to facilitate learning-by-doing in increasing returns activities. This should be coupled with a stronger alignment to a decent work agenda within a macroeconomic framework that addresses increasing global financialisation and its threats.